Business

What determines corporate transparency?

Article Abstract:

Corporate transparency, defined as the availability of firm specific information to those outside publicly traded firms, is conceptualized from a multifaceted system whose components covary within an economy. Investigations showed that financial transparency is primarily related to political economy, whereas governance transparency factor is primarily related to a country's legal/judicial regime.

Escalation errors and the sunk cost effect: an explanation based on reputation and information asymmetries

Article Abstract:

Foresight as an aspect of human capital is used to evaluate how rational decision makers can make escalation errors. Economic rationality is used instead of psychological factors to evaluate the phenomenon. Results indicate that escalation behavior is part of a larger process of hiding human capital information so that actions can acquire a reputation value.

The effect of increased transparency of information on the ability of decentralized decision makers to coordinate and take its advantage to increase welfare was experimentally investigated. The investigation revealed that the equilibrium achieved by the creditors is inferior from welfare perspective to other available equilibria.